Forex Market
AUD/USD ANALYSIS
Opened in Asia at $1.0597 after a strong recovery from NY lows of $1.0444 back to $1.0620 following the strong risk rally after the FOMC pledged continued low rates until 2014 and the likelihood that QE3 was just round the corner.
JPY ANALYSIS
Opened in Asia at Y77.78 after falling back from NY highs of Y78.28, The FOMC brought risk back on to the table as Fed’s Bernanke pledged low rates remaining until 2014 and raised fears of further QE as soon as February which sparked a massive risk rally in the EUR and Gold.
NZD ANALYSIS
The NZD was higher against the USD late Thursday, though below intraday highs, aided by the U.S. Federal Reserve’s announcement that it will keep interest rates exceptionally low until at least 2014.
Korea: outlook for growth is improving
· In our view, growth has bottomed in Korea. In H1 12, the risks are tilted towards GDP growth accelerating towards 4% y/y versus Bloomberg consensus estimate of 3.6%. · We maintain our view that Bank of Korea will remain on hold in H1 12.
FOMC extends dovish forecasts
The FOMC forecast that rates expected to stay at exceptionally low rates “through at least late 2014”. But does that mean anything for this market’s unbearably short attention span? My lowdown: this is a more dovish statement than I expected and I fail to understand why the Fed wants to put itself in a box […]
European Market Analysis
The JPY sank Wednesday to its lowest levels so far this year against the USD, EUR and GBP after Japan posted a trade deficit for the first time since 1980, while the euro slipped back below $1.30 against the buck in the absence of fresh news on Greek debt talks.
Technical Analysis
EUR/USD – sandwiched USD/JPY – sleeping beauty waking up AUD/USD – buyers keep responding EUR/SEK – high session close EUR/NOK – strong buyers’ response
Behavioral Finance: Daily Forex Outlook: Seeing through the transparent Fed
EUR USD (1.3025) Yesterday the euro shrugged off the IMF warnings about global growth and the Greek stalemate and continued to trade in firm territory. The market is again talking about what will be the outcome of the FOMC meeting, where a more transparent Fed is likely to reveal its assessment of the economic situation, […]
USD/JPY ANALYSIS
Opened in Asia at Y77.67 having finally broken out of shackles that had kept the pair around Y77.00 for so long. NY markets extended gains in Europe to highs of Y77.86, as the pair continue to see strong leveraged demand throughout the day, and the move buoyed by a WSJ article that reported Japan’s first […]
AUD/USD ANALYSIS
Opened in Asia at $1.0488 after lows of $1.0428 in NY, as fears of a non-agreement in the Greek debt swap weighed heavily on the EUR. Central bank and real money demand then led a euro recovery which hauled AUD back up.
NZD ANALYSIS
The NZD was trading slightly higher late Wednesday but its gains were capped toward the end of the New Zealand session as investors picked the AUD over the Kiwi. The AUD rallied after data released earlier in the day showed Australia’s 2011 fourth-quarter trimmed mean consumer price index gained 0.6%, which suggested to some in […]
Currency Strategy
Small and sound supersede size For the past two years, our long-term outlook has been focused on fundamentals as being the most important driver for currencies. The intensification of the euro crisis last summer made undervalued (fundamentally weak) currencies appreciate temporarily.